The Relationship between Earnings Management and Value Relevance of Accounting Informtion

Subject Areas :

S. Hossein Sajadi ¹ , Hasan Farazmand ² , Mehdi Arabi ³

1 - دانشیار دانشگاه شهید چمران اهواز
2 - استادیار دانشگاه شهید چمران اهواز
3 - کارشناس ارشد حسابداری و عضو هئیت علمی دانشگاه آزاد اسلامی واحد ماهشهر

Received: 2015-05-09 Accepted : 2015-05-09 Published : 2012-08-22

Keywords: Earnings Management, Accruals, Value Relevance, Earnings Per Share(EPS), Book Value Per SharE,

Abstract :

The purpose of this research is investigation of the impact of earnings management on value relevance of earnings per share and its book value as accounting information in the context of companies listed in Tehran stock exchange. This study used earnings management measures constructed by Leuz et al(2001) and Bhattacharya et al(2001) and examines the relationship between these measures and their impact on the value relevance of accounting information. In this research, data are analyzed for the period of 2004-2009 by using of the Pooled Data system and Ordinary Least Square Regressions(OLS) Model. The results show that aggregate earnings management measures are significantly negatively associated with the value relevance of earnings per share and its book value.